China’s B Share Market Wakes Up on Vanke Hong Kong Relisting

By WSJ Staff

A construction worker leaves the construction site of China Vanke Co.’s “Fun City” apartment complex in the Fangshan district on the outskirts of Beijing, China, on Monday, March 7, 2011.

China’s sleepy, foreign currency-denominated B share market is unusually active on Monday on expectations that more companies will transfer their listings to the more active Hong Kong H share market.

China Vanke Co. Ltd., China’s largest property developer by market value, said Friday in a filing it plans to move its shares to Hong Kong. Speculation over a relisting in Hong Kong from the illiquid B share market was sparked when Vanke’s stock was suspended on Dec. 26.

Vanke’s B shares are limit-up 10% at US$0.735 Monday, compared to the broader B-share index in Shanghai which is up 1.7%. In Shenzhen, where B shares are denominated in Hong Kong dollars, the B share index is up 3.4%. Shanghai Diesel Engine Co. Ltd., which resumed trading after a two-week suspension, also sees its B shares trading limit-up.

Vanke said it plans to convert its 1.3 billion Shenzhen-listed Class B shares–valued around 16.25 billion Hong Kong dollars (US$2.1 billion)–into Hong Kong-listed stock by way of introduction and without raising additional capital. It has 11 billion outstanding shares, including 9.7 billion yuan-denominated A shares, which have been traded on the Shenzhen exchange since 1991, and 1.3 billion Hong Kong dollar-denominated B shares, which debuted in 1993.

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